Vernon Smith, in his recent article in this Review [7], attempts to provide . . . a unified theory of production from natural resources encompassing production from exhaustible, as well as replenishable, resources. There is some question, however, as to the general applicability of Smith's model with reference to the optimum rate of production from exhaustible' resources, and therefore to his description of the optimum rate of investment in these industries. The purpose of this paper then is twofold: first, to discuss the rather limited nature of Smith's results concerning production and investment within the context of exhaustible resources; and secondly, to present a model that retains Smith's emphasis on the interrelationship of capital and resource extraction, but one that conforms to the established theory concerning the economics of exhaustible resources. The model presented in this paper, however, focuses on the individual firm as opposed to the industry model presented by Smith.